Indonesia sees sharp drop in inflation to 0.76% in Jan

February 03, 2025 (MLN): Indonesia's annual inflation rate was 0.76% in January, official data showed on Monday, dropping sharply from 1.57% in December and coming in below the lower bound of the central bank's target range for the year.

According to the country's statistics bureau, it was the lowest rate of inflation since January 2000.

The rate came in below analysts' estimate of a 1.88% in a Reuters poll and outside Bank Indonesia's (BI) target range of 1.5% to 3.5%.

On a month-on-month basis, the consumer price index dropped by 0.76% in January.

This was mainly due to a 50% discount in electricity tariffs for some customers and lower airfares, according to the statistics bureau.

The government has said electricity discounts will last until February as part of a set of incentives to support people's purchasing power, as Reuters reported.

The core inflation rate, which excludes government-controlled prices and volatile food prices, rose slightly in January to 2.36% year-on-year compared to December.

It was also close to the poll forecast of 2.30%.

BI delivered a surprise cut in rates at its policy review last month, and said inflation was expected to remain contained over 2025 and 2026.

It projected a 2.7% annual inflation rate at end-2025, with core inflation at 2.6%.

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